股 票 研 [Table_Title] Kevin Guo 郭勇 Company Report: Jiangxi Copper (00358 HK) 究 (86755) 2397 6671 Equity Research 公司报告： 江西铜业 (00358 HK) [email protected] 4 April 2019 [Table_Summary] 2018 Annual Results In Line, Maintain "Neutral" 2018年年度业绩符合预期，维持“中性”评级 公 The 2018 annual results of Jiangxi Copper was generally in line with [Table_Rank] 司 market consensus and our estimation. Total revenue of the Company Rating: Neutral Maintained 报 increased 4.99% yoy to RMB 215.29 billion, and net profit attributable to shareholders increased 52.54% yoy to RMB 2.45 billion. 告 评级： 中性 (维持) Company Report We expect the global copper market to be stable in 2019 and the average annual copper price to trade between US$ 6,100/t-US$ 6,700/t. We 6[Table_Price]-18m TP 目标价 : HK$10.80 expect gold price to remain flat in 2019 and fluctuate around the level of Revised from 原目标价: HK$9.30 US$ 1,250/oz. Share price 股价: HK$10.780 In 2019, the Company plans to produce 1.44 million tons of refined 告 copper, 0.21 million tons of mined copper and 25.0 tons of gold. The 证 output target of mining products of the Company generally remains the same Stock performance 报 compared to that of 2018. 券 股价表现 究 15.0 Revise up TP to HK$ 10.80, and maintain "Neutral". [Table_QuotePic% of return] 研 10.0 研 江西铜业 2018 年年度业绩基本符合市场一致预期和我们的估计。公司收入同比增长 究 5.0 4.99%至人民币 2,152.9 亿元，股东净利同比增长 52.54%至人民币 24.5 亿元。 0.0 券 报 我们预计全球铜市场在 2019 年将保持平稳，年度铜均价将在 6,100-6,700 美元/吨之间。 (5.0) 告 证 我们预计金价在 2019 年将基本持平并在 1,250 美元/盎司的水平附近波动。 (10.0) Equity Research Report (15.0) 在 2019 年，公司计划生产 144 万吨冶炼铜，21 万吨矿产铜和 25 吨黄金。公司矿产品的 (20.0) 产量目标与 2018 年相比基本保持不变。 (25.0) 上调公司目标价至 10.80 港元，维持“中性”评级。 (30.0) [Tab Apr-18 Jul-18 Sep-18 Dec-18 Mar-19 le_I HSI Index Jiangxi Copper nfo1 有] Change[Table_PriceChange] in Share Price 1 M 3 M 1 Y 色 股价变动 1 个月 3 个月 1 年 Abs. % 0.6 19.5 (2.2) 金 绝对变动 % 属 Rel. % to HS Index (3.5) (0.1) (1.5) 相对恒指变动 % 行 Avg. Share price(HK$) 10.7 10.2 9.9 业 平均股价（港元） Source: Bloomberg, Guotai Junan International. Nonferrous Sector Metals [Tab le_I Y[Table_ear End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE Profit] 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 nfo2 12/31 (HK$ m) (HK$ m) (HK$) (△ %) (x) (HK$) (x) (HK$) (%) (%) ] 2017A 204,241 1,651 0.477 96.3 22.6 13.732 0.8 0.200 1.9 3.5 江 2018A 214,395 2,415 0.697 46.1 15.5 14.372 0.8 0.200 1.9 5.0 2019F 217,273 3,180 0.918 31.7 11.7 15.015 0.7 0.276 2.6 6.3 西 2020F 221,296 3,333 0.963 4.9 11.2 15.689 0.7 0.289 2.7 6.3 铜 2021F 224,170 3,433 0.991 2.9 10.9 16.383 0.7 0.297 2.8 6.2 业 [Table_BaseData]Shares in issue (m) 总股数 (m) 3,462.7 Major shareholder 大股东 Jiangxi Copper Group 40.5% Market cap. (HK$ m) 市值 (HK$ m) 37,327.9 Free float (%) 自由流通比率 (%) 59.5% 3 month average vol. 3 个月平均成交股数 (‘000) 5,174.3 FY19 Net gearing (%) FY19 净负债/股东资金 (%) 53.7 Jiangxi HK) Copper (00358 52 Weeks high/low (HK$) 52 周高/低 (HK$) 12.100 / 8.150 FY19 Est. NAV (HK$) FY19 每股估值（港元） 14.7 Source: the Company, Guotai Junan International. See the last page for disclaimer Page 1 of 6 [Table_PageHeader]Jiangxi Copper (00358 HK) The 2018 annual results of Jiangxi Copper (the "Company") was generally in line with market consensus and our estimation. Total revenue of the Company increased 4.99% yoy to RMB 215.29 ] billion1 r , a andM t neth profitg i R attributable_ e l b toa T [ shareholders increased 52.54% yoy to RMB 2.45 billion. The significant growth in net profit was mainly attributable to higher metal prices and fair value change of financial assets. Average copper price increased by 2.7% yoy to RMB 50,711/t in 2018 and average gold price decreased by 1.92% yoy to RMB 271.4/g. The production of the Company was stable and the Company generally fulfilled its output target; the output of mined copper decreased by 0.62% yoy to 208,300 tons, the output of refined copper increased by 6.51% yoy to 1.46 million tons, the output of gold was generally flat at 25.28 tons, the output of silver 4 April 2019 decreased by 18.40% to 394.53 tons, the output of sulfur acid increased by 12.51% to 4.02 million tons, and the output of copper products was generally flat at 1.12 million tons. Figure-1: Gold price Figure-2: Copper price 2,000 12,000 USD/oz USD/t 1,800 10,000 1,600 8,000 1,400 6,000 ] 2 r a M t h g i R _ e l b a T [ 1,200 4,000 1,000 2,000 800 0 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-09Jan-10Jan-11Jan-12Jan-13Jan-14Jan-15Jan-16Jan-17Jan-18Jan-19 Source: Bloomberg, Guotai Junan International. Source: Bloomberg, Guotai Junan International. We expect the global copper market to be stable in 2019 and the average annual copper price to trade between US$ 6,100/t-US$ 6,700/t. We expect gold price to remain flat in 2019 and fluctuate around the level of US$ 1,250/oz. We expect the global copper market to remain at a normal level in 2019 just like in 2018, after a significant surge in 2010-2013 (00358 HK) and deep dive in 2014-2016. As China’s economy enters into the "new normal" era, global copper consumption demand is not expected to record such huge growth as seen during the last decade. On the supply side, miners confront a more stable market and expect reasonable returns. As a result, we expect the global copper market to become more stable under new 江西铜业 supply-demand constraint conditions. Copper mines are expected to enjoy comfortable profitability under the new copper price level. We expect copper price to trade between US$ 5,400/t-US$ 7,200/t in 2019, and average copper price may be around US$ 6,100/t-US$ 6,700/t. The monetary policy of the U.S. Federal Reserve (the "Federal Reserve") is expected to come to a turning point in 2019. Although the Federal Reserve will continue to raise interest rate and cut its balance sheet, the Jiangxi Copper pace will slow down greatly. The Federal Reserve is widely expected to raise interest rate twice in 2019, compared to 4 times in 2018. It is also expected that the balance sheet cut process of the Federal Reserve may be slowed in 2019. Although monetary policy of the U.S. Federal Reserve is still tight, pressure weighing on gold price in 2019 is expected to be less compared to that in 2018. However, the U.S. dollar is still expected to appreciate and market investors still lack interest in gold assets. We expect gold price to remain under pressure in 2019 as the monetary policy of the Federal Reserve remains tight. The performance of the U.S. economy has been much better than its western developed counterparts, but its prospects are facing more uncertainties. The chairman of the Federal Reserve indicated that the interest rate in the U.S. is closing to the neutral range, which means that a turning point is closing and there may not be more tightening. On the other hand, investor preference for gold assets remains stagnant as global financial markets are generally stable. We believe that the fundamentals of gold will not change much in 2019 and that gold price will remain flat. We expect gold price to fluctuate between US$ 1,100/oz-US$ 1,350/oz in 2019, and the annual average gold price to be around US$ 1,250/oz. In 2019, the Company plans to produce 1.44 million tons of refined copper, 0.21 million tons of mined copper and 25.0 Report tons of gold. The output target of mining products of the Company generally remains the same compared to that of 2018.The production of the Company was stable and the Company generally fulfilled its output target in 2018. Generally speaking, the output of mined copper, which contributes most of the profit to the Company, has remained stable over the past several years Company as mining capacity of the Company remained unchanged. Jiangxi Copper only acquired a partial stake in two copper mines with other companies in the past few years, and both of them are under construction and will take some time before See the last page for disclaimer Page 2 of 6 [Table_PageHeader]Jiangxi Copper (00358 HK) production can start. On the other hand, the expansion projects of domestic mines have almost all been completed. We expect the mining output of the Company to remain unchanged over the next few years.] 1 Ther a outputM t h ofg copperi R _ cathodee l b s a T [ increased by 6.8% yoy in 2018 and is expected to grow slightly in 2019.